80% Of Proton & Perodua Car Owners Opt For 9-Year Loans

Some eligible borrowers even extend the loan periods to longer than nine years.

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About 80% of Proton and Perodua car owners opt for loan periods of up to nine years, revealed AmInvestment Bank in a research note

Some eligible borrowers even extended the loan periods to longer than nine years, reported the New Straits Times.

The investment bank said the two local car brands are popular among demographics with moderate to lower incomes, who consider the vehicles a consumer necessity rather than a luxury.

"Their priority is the monthly instalment payments. Their financial balance is influenced by the prevailing interest rates.

"The everyday people closely monitor the Overnight Policy Rate (OPR) as their financial situation aligns with it. This is a factor that the government cannot overlook.

"Bank Negara Malaysia (BNM) has maintained the OPR rate unchanged at 3% since May last year," read the research note.

According to The Star, the combined market share of the two national car brands reached 66.9% in 2023, the highest since the early 2000s.

Image via FMT

AmInvestment Bank added that applications and approvals for car loans, particularly for the Myvi model, remain strong

High demand for the Myvi has led to delayed deliveries due to buyers rushing to purchase amidst ongoing needs and concerns about potential future OPR increases, reported Harian Metro.

Demand for used vehicles also remains high, unaffected by supply chain issues faced by manufacturers in mid-2023. At the time, the supply chain disruption led to lower production and excess demand in the used car segment, especially for affordable cars, including those made in Japan and domestically.

Buyers are also avoiding cars with large engine capacities, possibly due to concerns about fuel subsidy rationalisation.

Additionally, the research found that there is significant interest in battery electric vehicles (BEVs), particularly among the T10 income group, who view them as 'toys' suitable for weekend use.

"Of all the EVs (electric vehicles) purchased, customers opt for loan periods of five years, and some even pay cash, which is a common practice among the elite T1 group.

"Furthermore, various tax exemptions such as excise duties, sales tax, and road tax make BEVs a worthwhile investment for the elite," it said.

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